The Trump White House has enacted tariffs in the belief that other countries are “cheating” by enacting tariffs against US goods and “manipulating” their currencies. However, with the US dollar being the world's reserve currency, the US has engaged in dollar manipulation through inflation.
Mark Thornton cuts through the noise to explore the real economic threats facing America.
As Trump challenges Powell and the Fed’s authority, Dr. Joe Salerno joins Bob to dive into whether "central bank independence" really protects the economy—or just shields elite power.
Politicians and central bankers assure us that they are diligently “fighting” inflation. Actually, they are fighting inflation the same way that an arsonist fights against the fires he just set. Government is the inflation arsonist.
The ruling classes and their media blamed the 2008 financial crisis on free markets and too little government regulation. However, because the Federal Reserve promised to help cover losses in financial markets, it practically invited reckless behavior.
According to Keynesian “economics,” central bank interest rate cuts will make the economy stronger—unless the economy is in a “liquidity trap.” The truth is that these kinds of monetary tricks actually weaken the economy.
The principle of Occam‘s Razor states that we should avoid superfluous activity. When it comes to our monetary system, however, the Federal Reserve System doesn't simplify things, but instead complicates the economy. That alone is reason for it to be abolished.
President Trump‘s recent assertions that the Fed should lower the discount rate puts him squarely in the middle of Fed politics and exposes the messy truth that the Fed is not an independent group of experts but rather a tool of the political system.
What happens to businesses when liabilities exceed assets? They go bankrupt, with the spectacular failure of FTX being front-and-center. However, the Federal Reserve is in the same position but unlike FTX, the Fed can create fictitious assets and pretend that nothing is happening.
Economists like to claim that expectations of more inflation lead to, well, more inflation. Such beliefs ignore the fact that inflation is an increase in the money supply and that general price increases result from fractional reserve-created monetary expansion.
